Legislative Update, Feb. 6 2016

Legislative Update

Rep. Anne Donahue

Feb. 6, 2016

 

Pity that we can’t maintain focus on the critical issues before us – the economy and budget, education and health care – instead of being distracted by whether Vermont should make marijuana legal.

This bill is not in the House yet; in fact, it hasn’t reached the Senate floor. But that’s where I’m getting questions from constituents, so:

A few years ago, I was prepared to support decriminalization (changing possession of small amounts from a crime to a small civil penalty) on three conditions: continue to consider it criminal if possession was in a school zone, enhanced penalties for possession in a motor vehicle, and a higher fine for use in public places. The bill passed with none of those, so I voted ‘no’ and was left with little confidence that there was a commitment to protecting against use by young people or against drugged driving.

I see little urgency in shifting from our current decriminalization law to endorsing it as “acceptable” (the effect of legalization.) So I currently lean against this change.  

I look forward to hearing more input from constituents.

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The House bowed to pressure from school boards and the Senate to nearly completely repeal a bill passed less than a year ago to help slow the growth in school spending. The effect will be that towns that avoid large budget increases will take on some of the cost of those that do not. So anticipate another property tax increase that ignores local restraint.

If you heard about our midnight session to vote on this repeal, you know that even Vermont engages in political games.

Some eight years ago, I began to object to the end-of-session process of rushing final bills through without the time to even read them by suspending the usual rules and turning a three-day process into a half hour process. One of the few actual powers a minority party has is to refuse to suspend rules, because that requires a three quarter vote. So under my leadership, Republicans set out a ground rule that we would not agree to suspend rules without at least 24 hours to review it, unless there was consensus that it was a minor and non-controversial bill.

After weeks of legislative angst, last Thursday evening the Senate voted out its final bill and sent it to the House. The House Speaker scheduled it for a vote at 9:30 Friday morning. This required a rule suspension and would have left legislators with no time to even consult with their constituent towns or to assess the full fiscal implications of the Senate changes.

Democrats argued that there was great urgency because school boards had to finalize budgets by that Sunday, ignoring the reality that the window of opportunity had already passed, since budgets had already been adopted by then. There was no need to take the bill up before the next scheduled session on Tuesday.

Republicans voted against expediting the process. The Speaker kept the House in session for a revote at 3 p.m., threatening to convene the House again on Saturday. Republicans refused to bow to this bully tactic to suspend the normal process. Having been called on what may have been intended as a bluff, the Speaker had to save face and continue to maintain that it was an emergency. He reconvened the House for Saturday, which meant the Senate bill could be considered without needing to suspend rules.

Since it officially became Saturday at midnight, he set the session for 12:01 a.m. – ergo a first-ever January middle-of-the-night session. It cost tens of thousands of dollars for taxpayers, since legislators receive expenses for meals, and rooms or travel costs for the extra day.

(No, I did not put in a claim.)

Ironically, some news media reported that Republicans had tried to “delay” the bill. Last time I looked in the dictionary, refusal to suspend rules to expedite does not meet the definition of delay!

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How can a tax that raises money from doctors save on health care costs?  It doesn’t – but it does make it possible to grab more federal tax money to pay our state spending bills, so that is the rationale of this budget proposal by the governor.

Here’s how it works:

We place a tax on providers (in this case, adding independent doctors and dentists to our existing taxes on hospitals, nursing homes and home health agencies), and take the money to spend on our Medicaid costs. Since money spent on Medicaid is matched by the federal government, we double the value of the taxes taken in.

Some of that money goes back to providers in the form of Medicaid rate increases. (Medicaid rates pay doctors at well below what it costs to deliver the care.) But they don’t necessarily get back as much as they pay in, and it could end up hurting our access to health care as doctor’s practices become unsustainable – something that has already happened in several instances in parts of northern Vermont.

As my committee delves deeper into this year’s Medicaid budget, we’re also learning more about why the budget is shooting upward.

The federal Affordable Care Act didn’t increase income levels for eligibility in terms of Vermont, because Vermont already had programs (VHAP – the Vermont Health Access Plan, and Catamount Health, a subsidy program) for lower income individuals. But it changes how income is defined, with the effect of making more people eligible. Under federal law a person’s assets (money in the bank, or the value of a home) don’t count in calculating eligibility.

It also bans access to federal subsidies for those with low income if they are now eligible for Medicaid.

So don’t frown on a neighbor who is “taking advantage” of Medicaid despite being above poverty level in income and owning a nice home and car. They have no choice but to either accept Medicaid or pay full price (tens of thousands of dollars a year) for health insurance. And we are all required to have insurance or pay a federal fine.

Through no fault of their own, these folks can end up with a real windfall, because the free benefits under Medicaid are much broader than any regular health insurance. Some of those benefits, such as dental, are optional for states to provide. Others, such as transportation to get to the doctor, are mandated by federal law.

I am pushing to explore whether we can take a middle road and cut back on some of the optional added benefits for the newly eligible, instead of making other cuts to balance the Medicaid (and overall state) budget.

Medicaid is a big deal when we look at the budget. It is 30 percent of our state spending, only a bit under education (33 percent); all other human services supports are 16 percent. Because we pull in so much federal money (coming, of course, from our federal taxes) Medicaid is only about 20 percent of all spending from money raised directly by the state. Education is 50 percent.

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We’re also digging much deeper into the “all payer model” for health care reform. I’ll go into more detail another time, but it is not nearly as huge a deal as either feared or hoped.

Assuaging Fears: it does not change Medicare benefits. It does not turn Medicare funds over to state control. Medicare continues to be directly paid by the federal government to providers. Doctors who don’t want to be a part of new payment structures can still be paid the old way. Patients can still choose their own doctors, regardless of whether paid the new way (one payment for total care) or the old way (separate payments for each service provided.)

Lowering Hopes: it will create less cost savings than some may think. Better coordination of care and savings on doctor paperwork is likely, but other major drivers of costs will remain. Payers (the big three: Medicare, Medicaid and private insurance) will still pay their own separate rates to providers, so the cost shift – private insurance paying for what the state underpays – will not be solved. It will also add a new bureaucratic layer, because the new payment system requires that providers join an organization of multiple providers to contract for the rate and quality commitments.

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Thanks for the honor of representing you! You can contact me or Rep. Patti Lewis by email (counterp@tds.net for me; pattijlewis@myfairpoint.net for Patti) or by leaving a message at the statehouse at 828-2228. We welcome your feedback and input.